The China Luxury Committee event took place on the 18th of May in Shanghai. With expert speakers, the event was attended by an invitation-only guest list, including top-level executives from brands such as Chow Tai Fook, Focus Media, Tmall, Tencent, Gucci, Lane Crawford, Lululemon, Moet Hennessy Diageo, Kate Spade, Michael Kors and many more.
The event was highlighted by keynote speeches and a panel discussion, moderated by Chloé Reuter, Founder and CEO of Reuter Communications.
CEO of Secoo – the leading luxury online platform – Eric Chan gave many insights as to their success. The key aspect to Secoo’s success has been embracing the strength of offline experiences – even as an e-commerce platform, as well as not being afraid of diversification:
“We have venues all over China which are for experiences – Secoo Experience Centers. There, we have events such as cooking with Michelin star chefs, events for families and such. It’s all purchasable, from the food down to the utensils. We have art events, for example we just finished one in Beijing last week, as art is certainly a new luxury and is growing incredibly well in China.
At Design Shanghai we sold a new cocktail bottle and we sold out. We also have a farm to table theme, as we now sell fruit. Of course, the individual price is not so high, but it’s about the quality – we get the absolute best of each category. We recently sold 60,000 boxes of oranges in one month.
One of our most successful developments has been smart payment. Of course Chinese people choose to pay with WeChat or Alipay, but our own system, offers interest-free installments, spread over 12 months. This allows many more people to access more luxurious items that they could otherwise not afford.
Moreover, we have this system – we work with 23 banks on it – in department stores, for example Parksons, for their cosmetics. This means that customers there can use the same interest-free installment system even if they are not buying on Secoo.
If you ask what luxury is now, it’s not only fashion, but the ability to travel, to not only drink wine but to drink it under the stars in France. So we have a ’48 hour’ travel selection, as many affluent consumers are too busy to take too much time to travel. So it’s about diversifying.
Regarding the delivery of luxury fashion, we take the service standards of a retail store and bring them to the customer’s home or office. For example, if someone buys a suit, then we also take two other sizes, so they may check for the perfect fit. The staff are highly trained and deliver a personalised service, performing the little tasks that a luxury consumer expects.
Another of our initiatives is ‘on time show’, a collection of the top 100 Chinese designers. We think that it’s crucial to help incubate these designers, as Chinese designers lack sufficient help and support than their western counterparts receive. For a business, they should realise that Gen Z, who sometimes go under the radar, are very different. Their parents are wearing the classic fashion labels, and they don’t want to dress like their mum or dad. They want brands like supreme, like off-white. So they are looking for something different, and we believe the Chinese designers can provide this – they just need more incubating. In on time show, they are supported through supply chain and more so that they may succeed.”
As well as Eric’s insights, other speakers lent their China acumen with expert answers.
Sophie Sun, Founder of 5LUX.com was asked about ‘Daigou’, the Chinese sellers that buy in bulk overseas to re-sell to consumers.
“This is a lesson for brands – don’t have so much price difference! We surveyed our customers, and they said that maybe they can accept 10-20% price gap at most – let’s say that desperately want a particular product and they can’t wait for it to arrive in China. Buying products from Daigou not only means no service, no guarantee, no refund, but the product is still probably fake, the fapiao (receipt) is fake and the product never left China.
It’s actually the brands fault for price gaps. For example when one certain U.S. Brand came to China, they raised their price by 50%. But now, Chinese people can travel everywhere, can get long-term visitor visas everywhere, so they can’t be tricked! We know the price difference! If brands didn’t do this then they wouldn’t need to worry about Daigou, so they need to take responsibility for this.”
Frank Ma, President China, Samsonite was asked about how to succeed in the ever-changing Chinese market:
“Don’t have one China strategy. Yes, now it’s all about WeChat, and there are new trends that you hear about like Douyin. But big trends are here today and might be gone tomorrow. You can certainly use these to your benefit, but everything in China changes very fast. You should be ready and able to try the many different options out there, but don’t put everything into one. You need back up after back up. Ride the wave – but don’t necessarily believe in it.”
Jocelyn Phi, VP Hotel Marketing APAC, Four Seasons Hotels & Resorts was asked about what’s coming next, what can brands prepare for?
“It’s difficult to do any crystal ball gazing because the disruptors come without warning, and you have no idea what the next big one is going to be each year. It’s more about developing a culture of continuous learning.
We always hear the keyword agile, but this really means that you seek to continually understand a place, region by region, and if you understand it, then you will be able to react and adapt as necessary.”